Yesterday Netflix’s Chief Operating Officer and Chief Product Officer Greg Peters announced that it had selected Microsoft as our global advertising technology and sales partner. The fact that it was Peters making the announcement reminded me of something I wrote last July [NOTE: on the PARQOR Substack archive] when former Oculus and EA game development leader Mike Verdu was hired as vice president of game development, reporting to Peters:
What makes this move so interesting now is that with gaming to appear “alongside current fare as a new programming genre”, Peters and Verdu are going to have influence over content in the Netflix interface. To date, that has been dictated only by both Co-CEOs Reed Hastings and Ted Sarandos.
The surprising announcement emerged in the context of Netflix’s iterative progress into gaming, and of Microsoft having the best-selling game console worldwide and being one of the world’s largest (and best) gaming publishers [NOTE: and is soon to be larger when (or if) its acquisition of Activision Blizzard is finalized].
In this light, the partnership is about both monetizing programming with advertising and gaming. It implies Peters and his team now have more influence over Netflix's interface than Hastings and Sarandos (even if the new line item for advertising will launch at levels "flat-out tiny" for "streaming-video land", as The Information's Jessica Lessin estimated).
The Microsoft partnership has the optics of an incremental move into advertising. But, it has enormous implications not just for the future of Netflix's streaming business, but whether and/or how Sarandos and Hastings loosen their control over Netflix.
I don’t think it’s tin-foil-hat-thinking to ask why it was COO Greg Peters’ name on the press release and not that of Co-CEO Reed Hastings. Notably, it was Hastings who made “what appeared to be an unscripted move” to announce he was now in favor of pursuing ...